Health care costs vary by site

An ankle MRI at one doctor’s office in downtown Washington costs $400. Move about two miles northwest to another’s doctor office, and the price more than quadruples to $1,861. Head out to the Virginia suburbs, and the price jumps $300 more.

This kind of price variation has become common in health-care markets across the country, according to data from Castlight Health. It also highlights how little consumers typically know about the cost of the medical care they receive — and how much leeway hospitals and doctors have in setting prices.

Castlight works with employers to provide transparency into the health-care costs that workers face. The five-year-old company relies on data collected from 3.7 million workers in hundreds of metropolitan areas, creating one of the largest troves of private health price information.

“We realized people were paying more and more out of pocket,” Castlight chief executive Gio Colella said. “The average deductible is about $5,000 in an industry where people have little understanding of what they’re paying for. We wanted to solve that problem.”

In some cases, health providers reduces their fees once Castlight makes the price data public. One Midwestern hospital cut the cost for outpatient radiation by 60 percent after a Castlight report.

“I don’t think they’re a bad guy,” Colella said. “They’re using a system in which they believe this is what their value is. The ecosystem is complex.”

Last modified: March 18, 2013
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